Allianz pledges to stop insuring coal plants as pressure mounts on insurance industry
Financial services firm Allianz has set a target to eliminate its insurance coverage for coal, amid heightened pressure on the industry to end its support for the fossil fuel.
Allianz confirmed on Friday (4 May) that it would no longer provide standalone insurance coverage for coal plants or coal mines, and that it would phase out all coal risks from its business by 2040. The German insurer also announced that all companies planning to install more than 500MW of new coal capacity would be banned from its investment portfolio.
Oliver Bäte, chief executive of Allianz, said: “Allianz wants to cut the biggest climate killer out of the core business over time. We are getting even more serious on global warming.”
Since 2017, Allianz’s competitors AXA, Zurich and SCOR have decided to stop insuring some or all new coal projects. Allianz said its announcement goes further by pulling cover from existing coal projects.
The firm said it would lose the €50m of premiums that it generates from insuring single coal-fired power plants and coal mines each year, but added that it makes more than twice that amount by insuring renewable energy projects.
Commenting on the news, Peter Bosshard, coordinator of the international Unfriend Coal campaign, said: “The coal industry is the number one driver of climate change, and building new coal plants is incompatible with the goals of the Paris Agreement.
“We welcome Allianz’s move as an important step towards making the coal industry uninsurable and uninvestable.”
Coal is the single biggest source of CO2 emissions and exposure to the fossil fuel can cause strokes, heart and lung disease and lung cancer. It is hoped the decision by Allianz will add pressure on companies to exit the coal sector and make their businesses compatible with Paris Agreement goals.
So far, 16 insurers have divested an estimated €22bn from coal companies. Just last week, 18% of shareholders at Australian-British multinational Rio Tinto voted at the mining group’s AGM for a resolution that rejected the company’s funding of coal lobby groups such as the Minerals Council of Australia.
Paris City Council last week made a declaration which called on insurance firms – including Allianz – to withdraw their support from projects and companies in the coal sector. This arrived ahead of an annual meeting involving insurance chief executives in the French capital later this month.
Speaking at the time, Paris councillor Jérôme Gleizes said: “The role of insurers is still underestimated although they play a decisive role in preventing the risks of tomorrow. It is contradictory to warn about the cost of climate change on the one hand and to finance its acceleration on the other.
“Without their investments and insurance cover, no fossil fuel project could see the light of day. That’s why it was important for us to take advantage of their meeting in Paris at the end of May to call on them to honour the fight against air pollution and against climate change of which Paris is the symbol.”
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.